"The fact is that
income inequality is real; it's been rising for more than 25 years." Didn't he just say the same thing about global warming? His policy prescription is just about as off the mark. To fight global warming and energy independence, he wants to make more ethanol (which is unlikely to help with the latter and irrelevant to the former). The only policy proposals he has to address income inequality are his health insurance tax deduction and increasing Pell grants for education, two pretty useless proposals.
Growing income inequality is unstoppable without radical measures (kind of like global warming). The greatest contributions to the economy come from a few (about a million or so) extremely talented individuals. These people are getting better and better at figuring out how to keep more and more of the wealth they generate for themselves and at finding other equally talented people to help them make more and more money (as well as finding more and more people to work real cheap). Plus, as our society becomes more stratified (more gated communities, more bad schools and elite schools) the elite become less restrained in their lifestyles.
The frustrating thing is it's hard to see what these people are doing that's worth so much money. If we were seeing dramatic improvements in our lifestyles from innovative new products, we'd feel a lot better. There was a time when people were treated to the introduction of one amazing technology after another: Automobiles, airplanes, tractors, electrification, vast railroad networks, telephones, washing machines, vacuum cleaners, powered lawn mowers, refrigerators, dishwashers, air conditioners - things that made people's lives orders of magnitude better than they were decades earlier.
The television was perhaps the first major invention that gave people something they didn't know they needed. Since then that's about all we've had - industry is not only inventing things but inventing
the need for them. Home computers, personal audio devices, video games - these have not improved people's lives in any objective sense as, say, a washing machine did - they perhaps add to life's enjoyment, but that is surely debatable. The one industry that has without a doubt brought substantial improvement to people's lives over the last 50 years is probably the most despised - pharmaceuticals.
Granted, the remarkable advances of the first half of the century have not sat stagnant - all those things have been continuously improved. And, sure, it's great to have information at your fingertips and be able to make phone calls from anywhere to anywhere and to have all nine Beethoven symphonies on a device the size of a piano key (a black one) and be able to program a GPS device rather than have to write down directions. But is that all we get these days from our overlords, tinkering and trinkets?
Perhaps a return to the old steeply progressive income tax is in order. Something like a 30% rate from 100k thru 500k, then a 1% increase in the rate on each 50k after that. Someone making $2 million would pay 60 cents in FIT for each additional dollar made. How bad would that be? We had such rates in the past, and it didn't kill us. One thing seems clear - tax cuts this decade were followed by continued erosion in our manufacturing base, so that ain't working.